Analysis: Publication of warning to NI bosses tells the story of how secret payoff evolved
Reporters were riveted this week by a rare publication: a counsel's opinion commissioned by News International of the kind normally kept strictly under legal wraps.
Michael Silverleaf QC's view of the News of the World's phone-hacking scandal was so damning that a huge secret pay-off to a litigant followed in order to keep it covered up."To have this paraded at a public trial would, I imagine, be extremely damaging to [NI's] public reputation," Silverleaf wrote in June 2008. "There is overwhelming evidence of the involvement of a number of senior journalists in the illegal inquiries … There is a powerful case that there is (or was) a culture of illegal information access."
This reprise of the tabloid's by now well-known iniquities may have overshadowed something more significant: the continuing threat to James Murdoch, the likely successor to his father Rupert's empire.
The records obtained by the Commons culture, media and sport select committee from NI's former solicitors, Farrer & Co, include emails, billing files and handwritten notes, which provide an extraordinary anatomy of the developing cover-up. Those records, on one interpretation, appear to depict James Murdoch at its centre, despite his previous denials of complicity.
Julian Pike, the Farrer & Co lawyer handling the negotiations, testified that he believed Murdoch personally authorised up to £500,000 as a payoff to Gordon Taylor, the chief executive of the Professional Footballers' Association, as the price of his silence. When Murdoch testifies again next Thursday, his challenge will be to explain Pike's documents.
The NoW's legal officer, Tom Crone, and former editor Colin Myler both also insisted to the committee that they had put James Murdoch in the picture on the crucial point – that a "damning email" showed the NoW's "rogue reporter" defence was simply untrue and phone hacking was widespread.
James Murdoch is equally insistent that he was never told of the so-called "for Neville" email, and had no idea of the true state of affairs when he signed off on the secret settlement.
The story the documents tell begins on 24 May 2008, when Crone sent a doleful memo to Myler, the recently appointed editor. It was a briefing document "as the basis for [Myler's] chat with chief exec James Murdoch".
The memo described a devastating email "from a News of the World reporter enclosing a large number of transcripts of voicemails … fatal to our case … Our position is very perilous. The damning email is genuine." The journalist on the story "now remembers the transcripts".
Their opponents also had lists of crimes such as "'turning round' car reg and mobile phone numbers (illegal)" by NoW journalists. "A number of those names are still with us and some of them have moved to prominent positions on NoW and the Sun."
Crone had offered £150,000 for Taylor to drop the case. It wasn't enough. He had asked a senior QC for guidance but "inevitably" there would have to be a further "expensive" offer. Crone had reached the limit of his financial authority, according to subsequent testimony by Pike.
Myler confirmed to Pike that his "chat" with Murdoch had occurred, three days later. Pike's jotted note begins: "Spoke to James Murdoch – not any options – wait for silks view." James Murdoch previously denied to the committee that he had had any such preliminary chat.
Myler added an ambiguous phrase to Pike: "James wld say get rid of them – cut out cancer."
This apparently referred to the NoW executives investigated following earlier claims by the jailed reporter Clive Goodman that he had not acted alone. The phrase could mean Murdoch specifically discussed the potentially widespread nature of the hacking with Myler.
The QC's opinion was that a judge would regard the NoW's widespread hacking as "immoral and repugnant" and the publicity would be awful. Silverleaf recommended offering £250,000, saying it was "extremely unlikely" Taylor would get more at a trial.
But on the same day, 3 June, NI offered far more: £350,000, plus an extra payment in return for confidentiality.
Taylor's lawyer still held out, talking of "seven figures not to open his mouth". James Murdoch became involved for a second time. He met Crone and Myler at Wapping on 10 June. Murdoch claims the "for Neville" email was not mentioned and he was unaware of wider wrongdoing. He also claims: "Prior to the meeting of 10 June I do not recall being given any briefing."
Crone reported back to Pike that "JM said he wanted to think through options." Myler was "moving towards telling Taylor to fuck off". Myler appeared to note another worrying possibility: "Do a deal with them – paying them off + then silence fails." Pike says he thinks Murdoch authorised payment up to £500,000 at this meeting. In fact, the offer was upped to £425,000 plus lavish legal fees of £200,000.
Taylor took the money.